Struggling with debt? Ask a debt advisor a question

StepChange_James

Quarry wrote: »

I have credit card debts I cannot repay, following redundancy and illness. I have equity in my home which would cover the debt but desperataely don't want to lose my home. At 59 and with health problems, getting work is extremely difficult. I have no arrears at the moment. If I have to seek a DMP, can my creditors force the sale of my house? I can only afford to pay a few pounds a month.

Hi Quarry,

Thanks for posting. It's incredibly rare for unsecured debts to get to the point where they can affect your property. It's not impossible but I'd say it's very unlikely.

Your creditors would have to apply for a CCJ first of all (which most don't bother with if you're offering them a reasonable payment already). After the CCJ they'd then have to apply for something called a "charging order" where the judge grants an order to secured the debt against your property (it's sometimes possible to defend against this happening).

A charging order only means that you'd have to pay the debt out of any future house sale proceeds though. They'd have to then go back to the courts and request an "order for sale" which they would have to convince a judge was a good ideas (generally judges don't want to grant these orders so it's very rare that creditors apply for them).

So above I've outlined the process that would put your property at risk but in all honesty it's a tiny number of people that get all the way through that process. I've spoken to many people who've lost their properties because they've not paid their mortgages for a long time but hardly any who've lost their property because of debts that started out unsecured.

It's always a hard question to answer this one, as it would be untruthful to say your creditors can't force the sale of the property but at the same time it would be very hard for them to ever get the power to do that. I hope I've managed to give you a fair impression of how these things usually work.

DMPs aren't the only solution to debt problems, but it might be something that suits your situation. I'd suggest that you get in touch with us and we'll go through your finances and give you some advice on how to proceed.

You can get this advice online using our advice tool, Debt Remedy (http://www.stepchange.org/msehelp) or you can give us a call and an advisor will talk you through things (http://www.stepchange.org/Contactus.aspx).

Hope this helps.

James

StepChange_James

Quarry wrote: »

Hello.
I can no longer afford to service my credit card debts. I have been told that I could pay as little as £1 a month to each of my 4 creditors, under a DMP. I know someonw who has been doing this for approximately 10 years, however he has no assets.
The equity in my house would pay my credit card debts, however I am desperate not to lose my home. I have been made redundant and have health problems - at 59 I may not be able to get another job. Can my creditors force the sale of my house?

Hi again Quarry,

I think this was a duplicate post, but there's some slightly different information so I'll reply to that.

£1 a month wouldn't be a good long term plan for your debts so a DMP wouldn't be a good option. We wouldn't want to recommend a strategy that would keep you in debt indefinitely.

If you contact us using the details I put in my post above then we'll help you plan a monthly budget, see what you can afford and advise you on what options would suit your situation.

All the best.

James

StepChange_James

cools44 wrote: »

Hi There

I am new here, but have already found some truly excellent and uplifting advice via this forum and website, and have to say it is excellent!! Thank you!!

I have a question regarding Council Tax Bailiffs and their rights to enter a property.

In several places I have read that a Bailiff is not allowed to break into your property, but may have further entry rights if you let him in, or if you leave a door / window open etc.

My question is, if my lodger or someone else and not me - (I am the actual debtor) opens the door to a bailiff un-benown as to who is at the door, are they (the Bailiff) then entitled to enter the premises again in the future, or do they have to speak to me in person before that can happen?

I am the one currently trying to organise a payment plan with the collection agency, for a historic Council tax debt, and they are making the usual threats about attending with a van and selling goods, if I do not make the full payment immediately.

I have read various articles about my rights and the law etc, but am unclear on what the law states with regard to a third person opening the door when a Bailiff calls?

Would greatly appreciate any comments and clarification.

Thank you for your time and help.

best wishes

Mark

Hi Mark and welcome to the forum. Really glad to hear that you've found everything here useful. I'd agree with you, the community on MSE are great folks and really helpful.

If a bailiff gains peaceful entry into a property they could be deemed to have obtained "walking possession" which is the term to describe a situation where they've got extended rights.

If a third party let the bailiff in and they entered the property then this would be classed as them obtaining walking possession.

In reality, my experience has been that bailiffs prefer to avoid these grey areas and will usually look to talk to the debtor and if they do get into the property will try to get a signed walking possession agreement from the person who's in debt.

You're doing the right thing to negotiate over the phone and try to get an agreement set up. If you're finding this tricky or would generally like some advice on your finances then I'd suggest you get in touch with us.

The links in my signature below will take you to our website where you can get more help.

Kind regards

James

Lizardwoman1

Please can someone help me I am about to fill in the forms for bankruptcy but not sure what is allowed please could someone help as I have found conflicting information.

We are a family of 5 two adults and 3 children.

Obviously council tax water gas and electric etc I know but I could do with knowing how much I should put down for clothing haircuts food and household items holidays birthday and christmas and childrens activities.

StepChange_James

Lizardwoman1 wrote: »

Please can someone help me I am about to fill in the forms for bankruptcy but not sure what is allowed please could someone help as I have found conflicting information.

We are a family of 5 two adults and 3 children.

Obviously council tax water gas and electric etc I know but I could do with knowing how much I should put down for clothing haircuts food and household items holidays birthday and christmas and childrens activities.

Hello,

I've just answered this question over on the bankrutpcy board: http://forums.moneysavingexpert.com/showpost.php?p=59441863&postcount=67

Kind regards

James

rankam

OK so where to start...............My Father in law passed away this week after a long illness. Having gone thorugh his paperwork this week we have discovered that he and his wife (who is still alive) took out an appreciation mortgage on their property in 1997 for £40,000 which entitles the RBS not only its £40,000 but also 75% of the profit on any sale of the house, (which at the time was valued at £160,000)

In 2003 they then took out another £30,000 mortgage against the same property in the same manner with the RBS with the house now valued at £240,000. All of which would you say might be bad enough.............but it gets worse.

It appears that they have then run up debts totalling £114,000 on a variety of unsecured loans & credit cards and if that wasn't bad enough have then taken up "Eurodebt" to assist them with a DMP to "solve" their problems.

Within the paperwork I can see that Eurodebt are changing them to handle the repayment plan and the majority of the debt seems to be in my father in laws name; so my question(s) are these?

When I contact Eurodebt to inform them of my Father in laws death do we know if some of the debt will be written off? i.e. those in his sole name?

Is it easy to then cancel the Euro Debt repayments and approach one of the charity organisations that handle these plans to service the debt still owned by my mother in law?

Can the outstanding creditors sue my late father in laws estate to force the sale of the family home if these loans are unsecured?

Would it be better for my mother in law to apply for a IVA?

Should I get my mother in law to handle the calls/processes involved as to ensure my own estate does not beccome embroiled in the process?

Answers to any or all of the above from your experiences would be greatly appreciated

Regards

Rank

StepChange_James

rankam wrote: »

OK so where to start...............My Father in law passed away this week after a long illness. Having gone thorugh his paperwork this week we have discovered that he and his wife (who is still alive) took out an appreciation mortgage on their property in 1997 for £40,000 which entitles the RBS not only its £40,000 but also 75% of the profit on any sale of the house, (which at the time was valued at £160,000)

In 2003 they then took out another £30,000 mortgage against the same property in the same manner with the RBS with the house now valued at £240,000. All of which would you say might be bad enough.............but it gets worse.

It appears that they have then run up debts totalling £114,000 on a variety of unsecured loans & credit cards and if that wasn't bad enough have then taken up "Eurodebt" to assist them with a DMP to "solve" their problems.

Within the paperwork I can see that Eurodebt are changing them to handle the repayment plan and the majority of the debt seems to be in my father in laws name; so my question(s) are these?

When I contact Eurodebt to inform them of my Father in laws death do we know if some of the debt will be written off? i.e. those in his sole name?

Is it easy to then cancel the Euro Debt repayments and approach one of the charity organisations that handle these plans to service the debt still owned by my mother in law?

Can the outstanding creditors sue my late father in laws estate to force the sale of the family home if these loans are unsecured?

Would it be better for my mother in law to apply for a IVA?

Should I get my mother in law to handle the calls/processes involved as to ensure my own estate does not beccome embroiled in the process?

Answers to any or all of the above from your experiences would be greatly appreciated

Regards

Rank

Hi Rank,

Thanks for posting and I'm sorry to hear about your father in law.

To keep things as simple as posssible I'll reply to each question under a different bullet point:

Once the creditors are informed of the death they will either write the debt off or make a claim against the estate. It's down to the creditors how they proceed sometimes they don't bother, particularly if there's not much chance of them getting their money back. Any joint debts will become debts solely in your mother in law's name.

• It should be quite straight forward to move away from Eurodebt. The set up charges on fee paying DMPs are usually loaded at the beginning, so it's very rare to hear of any exit fees or anything like that. A simple letter to cancel usually does the trick (though prepare for them wanting to keep the plan going).

• As I mentioned above, the creditors could make a claim against his estate but it sounds like there would be very little equity in the property. Probate law is a little bit outside our area of expertise, but you can get help from Community Legal Advice which might offer more information here (https://www.gov.uk/community-legal-advice).

• It's hard to say if an IVA would suit your mother in law without knowing more about her finances. We can give advice about these options if you get in touch with us.

• I can imagine that with the recent bereavement it might be a struggle for your mother in law to handle lots of phone calls about her finances. We can speak to her directly but if you or anyone else wanted to speak on her behalf that would be fine and wouldn't have any consequences for your own finances.

I'd recommend that your mother in law gets some more in depth advice. We can do this either online or over the phone.

We have an online advice tool called Debt Remedy (http://www.stepchange.org/msehelp) which takes financial information and then provides customised advice. Providing your mother in law gave permission, someone else could fill this in on her behalf.

Otherwise we have a telephone service which will be able to offer advice (http://www.stepchange.org/Contactus.aspx). Again, someone else could do this on her behalf, your mother in law would just have to briefly come on the phone to give us permission to talk to someone else.

I hope this helps, feel free to post up any questions you might need.

Kind regards

James

MarieC5575

I posted a few weeks ago regarding a DMP. I have now completed the debt remedy which advised a DMP. I have organised all the relevant documents which now just have to be sent however after reading through the debt advice I am unsure if I would be better applying for a DAS. I contacted the help line and was advised that if the DAS was the best course of action it would have been one of the choices offered however DMP was the only option listed. The advice letter however states that "you may want to look into the possibility of a DAS" so now I'm not sure and it takes weeks to get a finance appointment at the local CAB but I don't want to leave it any longer only to find out I'm not eligible and have to take on a DMP anyway. Can you advise?

Di_B

Hi.

My friend has got himself into a lot of debt over many years. Now I am helping him he is slowly getting sorted out, but things keep coming up that he hadn't told me about!
There are a couple of issues, that we could do with some help with?

1. He has been getting charges upon charges from his bank for unauthorised overdrafts. There are still direct debits bouncing.
I have arranged to go in to see/review his account at local branch. See if we can reduce charges this month/cancel DD's.
Is it worth cancelling this account? (I think so as it is a new start). If so, should he shut the account down, or ensure there is enough money in there to cover all charges and overdrafts (this would leave him just about £100 for the month).
Thinking of getting a basic barclays account for him due to low charges etc just in case!
Whatever happens I will be trying to get some of those charges back for him as well once I collect all the info together.

2. He had a loan with Welcome. Although they no longer exist, a 3rd party bought his debt and there is about £2.5k outstanding.
If this loan had a PPI agreement attached, would he be able to reclaim for the PPI against the 3rd party? Even if it just cleared the debt it would really help.
I would assume they would have details of the loan if they are collecting on it? We have no details and he is not sure if PPI was paid or not. This is for a debt that is from 2002-2004ish? (Note the car involved has been scrapped, so there is nothing securing this loan)

Many thanks in advance for any help.

Quarry

Thanks for your help James. I have now contacted StepChange and have made a telephone appointment to speak to an advisor. The person taking the call said that there is no way I could lose my house. You have said that it is unlikely but possible. It seems it is very unlikely but it is the uncertainty that is the problem. If I could agree to a charging order tomorrow I would, beause at the moment I can't relax in my home and feel my life is on hold.
Is it possible to offer to agree to a charging order without the creditors seeking one? Could interest continue to accrue?